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Life Cycle of an Oil Well

By: Dylan White, Reservoir Engineer

Life Cycle of an Oil Well

Oil and gas exploration and production are complex endeavors. Drilling a well is an incredible process involving 10 to 30 different service companies, each one adhering to stringent around-the-clock scheduling, safety, and environmental practices.

To better understand this process, we’re going to break it down into 4 stages:

●      Planning and Selection

●      Construction

●      Production

●      Plugging and Abandonment

Stage 1: Planning and Selection

During this initial phase, the goals for the project are set out, including if and where to drill, and the potential for field development.

Members of the oil company’s executive staff and senior exploration team meet to review information associated with research and initial analysis, lease options, potential reserves, risk factors, environmental concerns, and costs.Geologists, geophysicists, and reservoir engineers start working together to conduct extensive research regarding mapping, well logs, or any existing seismic to provide information on the potential of a prospect.Once a prospect area has been selected, the right to drill must be secured by leasing the mineral rights of the desired property from a landowner or mineral owner. If the landowner no longer owns the mineral rights, an experienced landman is needed to research deed history and negotiate leases.Once titles are researched, blocks of land are put together to create the lease area. An application for a permit, description of the proposed drilling program, a copy of the plat, the permit fee, an environmental assessment, water allocation, air emissions, and land use and disturbance must be submitted.

Often companies require additional information as they try to determine optimal locations to drill new wells.

A 3D seismic survey is one of the most valuable tools used to gain a better understanding of the rock formation below. With the use of advanced software and powerful computer hardware, large amounts of seismic data can be processed. A geophysicist then interprets this information to create a three-dimensional view of the layers of rock below.

When a prospect has passed the oil companies’ evaluation criteria, a drill site location is then selected. Then, an “Authority for Expenditure”, or AFE, is prepared by a lease operator and sent to non-operators before work can begin. This budgetary document, which requires approval prior to commencement of drilling, lists the estimated expenses of the planned well.

Stage 2: Construction

Once the survey has been completed, a stake will be placed where the well is to be drilled. Access roads are created so workers and equipment can get to and from the rig. The site is cleared and leveled with a bulldozer. For support and permanent positioning of the wellbore, the cellar and conductor holes are dug and secured into place. The following phases are key to ensure the correct construction and implementation of the well:

●      The drilling rig and equipment are then trucked to the location, onloaded, and placed.

●      Crew housing facilities, water lines, and electricity are brought in for 24/7 operations

●      A reserve pit is excavated to capture drilling fluids, cuttings, and mud discharges, so they can be recycled or disposed of properly.

●      A “closed loop system,” is implemented to separate the fluids and drilling solids so they can be reused or recycled.

●      After the rig is erected, equipment is moved onto the rig floor, assembled, and connected to power sources, or pressurized piping systems.

Next, the hole for the surface casing is drilled and a drill bit is mounted on the end of the drill pipe.

– Freshwater and bentonite mud is pumped into the hole to cool the bit and flush the cuttings to the surface.

The pipe and bit are removed and the surface casing is inserted into the hole, which serves to keep the wellbore intact, isolating the freshwater zone from contamination. This is also the pipe to which the BOP and wellhead are attached. The casing is secured into place by pumping cement through the casing and the shoe at the bottom of the hole. This acts as a barrier to provide a permanent layer to protect the freshwater aquifer.

A blowout preventer, or BOP, is installed on top of the wellhead before the drilling of the well begins. It usually consists of an annular preventer, blind ram, blind shear ram, and pipe ram. Its function is to seal off the wellbore to contain erratic down-hole pressures called “kicks” and the uncontrolled flow of formation fluids. Otherwise, this underground pressure can force the release of gases, fluids, and equipment, causing explosion, fire, and loss of life.

Since it costs millions of dollars to drill an oil well, it is very important to gather as much information as possible at every stage to determine if it makes good business sense to continue drilling and complete the well. Drill Stem Testing, also known as a DST, is a procedure used on exploratory oil and gas wells to determine the boundaries and commercial productive ability of a hydrocarbon reservoir. This helps geologists get a good idea of the rock structure and possible presence of hydrocarbons across the area.

Stage 3: Production

Once the well is drilled, oil and natural gas need to be released for extraction. A coil tubing unit, or workover rig, is brought on location to perforate the targeted zone. To stimulate production, a technique called “Frac” or “Fracking” is put into place to create small fractures in the rock formation.

– Water, Sand, Other Proppants, and Chemicals are pumped into the wellbore under extremely high pressure, causing it to fracture or crack. The sand and other proppants hold the tiny fissures open and allow the released oil to flow to the wellbore.

This process is repeated in multiple stages to extend across the entire wellbore. Once the fracking process is complete, the plugs placed between the frack stages are then drilled out to remove any restrictions in the wellbore. The frac fluid, also known as “flowback liquid”, flows back up to the top of the well, along with hydrocarbons.

The recovered frac fluid is treated, and most reused on subsequent hydraulic fracturing jobs to conserve water and also as a cost-savings measure. Now, oil and natural gas are ready to be produced and collected. The crew runs a small diameter pipe called “production tubing” inside the production casing string. This serves as the conduit for oil or gas to flow up the well and adds another layer of protection to isolate the hydrocarbons from the potable water table.

During the production phase, oil is sent from the wellhead to the heater treater for initial processing. All liquids from the well are heated, the oil separates and floats to the top of the settling water while gas is break free and rises to the top of the tank. Finally, the oil is sent to the storage tanks to await transport to the pipeline.

An oil well can produce for 10 to 30 years during the primary recovery phase.

During field development, additional wells are drilled on the lease to maximize the recovery of reserves. Field development occurs in stages and includes many of the oil companies’ same teams of geoscientists and engineers who studied and evaluated the data to justify the initial well.

When the well no longer produces at an economic rate, the final steps in a well’s life cycle are abandonment and reclamation. Once production has declined, secondary or tertiary recovery methods can be used to extend the life of the well. The wellhead and associated equipment are removed; the wellbore is filled with cement; and the well cap enmeshed.

Stage: 4 Plugging and Abandonment

When the oil or gas well has reached the end of its useful life, it turns into a dry hole and needs to be plugged. Plugging requires a workover rig and cement pumped into the wellbore; this minimizes wasted material and helps reduce nonproductive rig time. This process normally takes two days to a week to be set in the well.

Finally, the area is reclaimed and the lease is relinquished back to the landowner. Oil and gas, and the many technical and skilled people involved in drilling an oil well, are crucial resources we are dependent on each and every day.